WASHINGTON: After three rough trading days, US markets are bouncing back strongly on Tuesday morning.
Dow futures jumped 1,000 points, marking a 2.5% increase.
S&P 500 futures climbed 2%, while Nasdaq futures rose 1.8%.
Investors seem eager for a break from recent market volatility.
They are now looking for cheap buying opportunities amid low stock valuations.
Investor Sentiment
S&P 500’s price-to-earnings ratio dropped below 17 on Monday.
That level is considered historically low, attracting buyers.
Truist strategist Keith Lerner called the rebound technical and expected.
He said markets don’t move in straight lines after sharp drops.
Investors fear missing a rally, adding fuel to the bounce.
Fake News Spike
On Monday, false reports claimed Trump might pause tariff hikes.
Markets briefly surged before the White House denied the rumor.
Even that short-lived optimism showed traders crave good trade news.
Michael Block from Third Seven Capital commented on this sharp reaction.
He said the market is now hungry for real positive news.
Tariff Concerns
Trump’s new tariffs hit nearly all imported goods on Saturday.
These new levies sit at 10% across the board.
More severe tariffs are coming for dozens of other countries.
Some of these could go as high as 50%.
Tariffs on Chinese goods might spike up to 70%.
Trade Tensions
Trump warned of another 50% tariff on China last week.
He demanded China drop its retaliatory tariffs or face consequences.
China responded strongly, saying it will “fight to the end.”
The Commerce Ministry declared continued resistance to Trump’s strategy.
This stand-off increases fears of a prolonged global trade war.
Recession Risk
Top banks warn of a potential recession if trade wars escalate.
Goldman Sachs and JPMorgan issued these warnings last week.
They expect global growth to decline under heavy tariff pressure.
Recession worries have driven recent market panic and sell-offs.
Demand for stocks could continue to drop if tensions rise.
Mixed Reactions
Peter Navarro remains hopeful about the market’s future recovery.
He said the bottom has been reached during a Fox interview.
Navarro predicted recovery led by American-based S&P 500 companies.
He went as far as forecasting Dow 50,000.
He dismissed the idea of a looming recession entirely.
Wall Street Warnings
Not everyone agrees with Navarro’s view of economic strength.
JPMorgan CEO Jamie Dimon warned tariffs will raise consumer prices.
Dimon said this weakens US alliances and harms global relations.
He added tariffs could slow the economy further this year.
Others like Elon Musk and Bill Ackman also voiced concerns.
Global Movement
Despite US uncertainty, stock markets rose around the world Tuesday.
Japan’s Nikkei 225 index surged by 6% after recent losses.
South Korea’s Kospi posted a smaller 0.3% gain.
Australia’s ASX 200 rose by 2.3% during the day.
Hong Kong’s Hang Seng Index also recovered with a 1.5% rise.
European Response
Europe’s markets followed Asia with moderate gains of their own.
The STOXX 600 index climbed 1.4% across the continent.
France’s CAC index increased by 1.6% in Tuesday trading.
Germany’s DAX index moved up 1.3% during the session.
The UK’s FTSE 100 saw a 1.9% jump by close.
